WiFi contract restructuring may not alleviate cost issues

The restructuring could cut the state’s costs. The move also figures to reduce — but probably won’t eliminate — the cost gap between the winning bidder and the low bidder on the controversial project.

Betsy Russell of the Spokane Spokesman-Review reported Friday on the restructuring deal. Education Networks of America will now be paid based on the number of high schools and junior high schools that sign up for the state-provided wireless service — or, more precisely, the number of students who will ultimately have access to WiFi. Originally, the Nashville, Tenn.-based company agreed to a flat fee of $2.11 million for 2013-14, regardless of how many schools signed up.

The change was made in response to pressure from lawmakers.

“To me, it made no sense being charged the same whether one school signed up or every school signed up,” Senate Education Chairman John Goedde, R-Coeur d’Alene, told Russell. “The concessions didn’t necessarily satisfy all my concerns. Whether the concessions they’ve made will be palatable enough for the Legislature to appropriate funds again is the real issue.”

The restructuring is the latest plot twist surrounding a contract that has drawn fire for weeks, pitting Superintendent of Public Instruction Tom Luna against fellow Republicans.

The 2013 Legislature appropriated $2.25 million for the WiFi contract, as part of a public schools budget signed into law by Gov. Butch Otter. In July, Luna signed a five-year contract with ENA, with options that could extend the deal to 15 years. Otter and some key legislators have questioned the use of one-time money to bankroll the first installment of a multiyear agreement.

That’s not a moot issue, since the contract is subject to state funding. If lawmakers decide not to fund the WiFi in 2014 or any future year, the contract is null and void.

It’s unclear exactly how much the contract restructuring could save the state. Under its contract, ENA will charge $21 per user per year. According to state Department of Education estimates, about 203 schools are expected to sign up for the WiFi — and the schools have a total enrollment of 89,863. Based on $21 per user, that would bring the first-year cost down to roughly $1.89 million, a savings of close to $225,000.

The state received 10 bids for the contract, and four bids came in below ENA’s one- and five-year costs. The low bidder, Twin Falls-based Tek-Hut, came in with a low bid of $1.65 million.

If the contract restructuring brings down ENA’s first-year bill to $1.89 million — the current projection, based on the Education Department’s estimates on WiFi use — this still leaves a $238,000 gap between Tek-Hut’s low bid and the cost of the ENA contract.